In a system that can learn to recognize new patterns, learn to recognize new patterns of patterns, and can associate new patterns with already known patterns, how is memory unexplained?
Well sure, if you take memory for granted then yes, it is already explained.
What do you mean? In this model "memory" (as in, the ability to remember things you have learned, seen, thought, or otherwise experienced) is emergent from the ability to form new pattern recognizers... The ability to form new pattern recognizers is not itself built on this "memory".
Do you mean that you are questioning the ability to form new pattern detectors? Do you think that isn't done, or do you just think the mechanism behind how that happens is inadequately explained?
And besides, it's not like this is news to anyone. Psychology & Neuroscience literature have known pattern recognition is an integral part of how the brain works for decades now. If it were the secret ingredient to the human brain, someone would have written about it far before Ray Kurzweil did.
And it seems like everyone (including Kurzweil) forgot, pattern recognition is not exactly an easy thing to harness (the brain is far superior while consuming less power), so even if pattern recognition is THE SECRET to human intelligence, it doesn't really get us much closer to understanding the brain.